Answered: Suppose you want a 35-year, fixed-rate…

Suppose you want a 35-year, fixed-rate mortgage loan in the amount of $144,400. If the lowest fixed annual interest rate you can find is 5.5%, find the monthly mortgage payment

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter5: Making Automobile And Housing Decisions

Section: Chapter Questions

Problem 10FPE

See similar textbooks

Related questions

Q: Suppose a bank offers you a 10% interest rate on a 20-year mortgage to be paid back with monthly…

A: The mortgage amount that can be taken is the present value of monthly payments

Q: You plan to purchase a house for $ 400,000 and you will make a 20% down payment. You are evaluating…

A: The mortgage is taken to purchase or maintain real estate. The borrower pays the lender regular…

Q: Suppose your gross monthly income is $5,500 and your current monthly payments are $575. If the bank…

A: Maximum monthly payment = (Gross monthly income *Allowable % for monthly payments)- Current monthly…

Q: You can afford to pay $750 per month for mortgage payments. How large a loan can you afford if the…

A: A mortgage is one kind of secured loan. When the borrower is unable to repay the principal or…

Q: Consider a 15 year, fixed rate mortgage for $150,000 at a nominal rate of 8%. The loan comes with a…

A: A fixed interest rate loan is where your Interest Rate is locked in (i.e. fixed) for a certain…

Q: Suppose you purchase a house using a 30-year fixed rate mortgage. The APR on the loan is 3.2% and…

A: The current price of the house is computed by computing the present worth of the house. The formula…

Q: You can afford a $850 per month mortgage payment. You've found a 30 year loan at 8% interest. a) How…

A: The present value function or concept can be used to determine the present value of a future sum or…

Q: Phil Pittman is interested in a fixed-rate mortgage for $300,000. He is undecided whether to choose…

A: The given problem can be solved using PMT function in excel. PMT function computes installment…

Q: Suppose you have a $175,000 30-year mortgage with a 4.5% interest rate on the loan. b. How much…

A: A written agreement through which a lender gets the right to take the property that is put as a…

Q: Suppose you obtain a mortgage loan of $210,000 at an annual interest rate of 5.0%. How much less is…

A: The interest paid increases as the term of the loan increases.

Q: Consider the following pairs of choices for a $120,000 mortgage loan. Calculate the monthly payment…

A: PMT Excel function is used to determine the amount of the equal period payment. Closing cost is…

Q: Consider a 30-year, fixed-rate mortgage for $100,000 at a nominal annual rate of 9%. If the borrower…

A: GIVEN, N=30 P=$100,000 R=9% PAYMENT=12

Q: Which of the following statements regarding a 30-year monthly payment amortized mortgage with a…

A: Amortized schedule is the schedule that depicts the amount of interest paid every month and the…

Q: Consider a 30-year fixed-rate home loan of $410,500 with an interest rate of 3.125%. What is the…

A: The monthly payment can be calculated with the help of present value of annuity function

Q: Your friends suggest that you take a 15-year mortgage, because a 30-year mortgage is too long and…

A: Installment is the amount of periodic payments a borrower has to make to its lender in order to pay…

Q: Suppose you have a $175,000 30-year mortgage with a 4.5% interest rate on the loan. a. Find the…

A: A written agreement through which a lender gets the right to take the property that is put as a…

Q: You have a choice between a 30-year fixed rate loan at 6.5% and an adjustable rate mortgage (ARM)…

A: EMI or monthly or annual mortgage payments are the fixed amount paid by the borrower to the lender…

Q: Suppose you have good credit and can get a 30 year mortgage for $100,000 at 5%. What is your…

A: Amount of Mortgage (pv) = $100,000Time Period = 30 yearsNumber of Payments in a Period = 12Total…

Q: You can afford a $1400 per month mortgage payment. You've found a 30 year loan at 8% interest. a)…

A: given, pmt = $1400 m = 30 years r = 8% applying formula for pmt: pmt=loan amount…

Q: Suppose you take out a 45-year $125,000 mortgage with an APR of 6%. You make payments for 5 years…

A: Original loan = $125,000 APR = 6% New loan APR = 5.2%

Q: Suppose you want to purchase a house. Your take-home pay is $⁢4230 per month, and you wish to stay…

A: Cost of house depends on the monthly payment and down payment you have.

Q: Suppose you take a 30-year fixed-rate mortgage loan for $600,000 with a mortgage rate of 6%.

A: in this we have to calculate annual payment and than find out how much is paid and how much is…

Q: Suppose you want to purchase a house. Your take-home pay is $2790 per month, and you wish to stay…

A: Note: We are considering that the monthly payment is ¼ of the take home pay. Given: Take home pay =…

Q: A borrower is making a choice between a mortgage with monthly payments or biweekly payments. The…

A: a) Calculate the monthly payment as shown below: Hence, the value of the monthly payment is…

Q: Consider a 20-year mortgage for $174,334 at an annual interest rate of 5%. After 8 years, the…

A: Time period = 20 years Value of mortgage = $174,344 Annual interest rate = 5% Refinancing time…

Q: Consider a mortgage of 180,000. What is the payment if it has a 15 year fixed rate at 3.5% with…

A: The monthly mortgage payment is the total of the Principal repayment and interest cost which is due…

Q: Based on the following scenario, how much is the monthly savings when comparing a conventional loan…

A: Due to insurance the interest rate being charged is lowered by banks due to safety of repayment.

Q: Suppose you purchase a home and obtain a 30-year fixed-rate loan of $145,000 at an annual interest…

A: Time Period = 30 years*12 = 360 months Loan Amount = 145,000 Interest% = 7.5%/12 = 0.625%

Q: A mortgage banking company has been evaluating the merits of a 50-year mortgage (in addition to…

A: Given information: Mortgage loan is $300,000 Interest rate is 6% compounded monthly Number of years…

Q: Consider a 30-year, fixed-rate mortgage for $120,000 at a nominal rate of 6% with monthly payments.…

A: Loan amount(PV)=$120,000 Duration (n)=30*12=360 periods Rate per period(i)=0.0612=0.005 Monthly…

Q: What is the maximum APR you can accept if you can afford to make monthly payments of $120 on a…

A: The yearly rate that borrower pays on loan and investors receives on deposits is the annual…

Q: Consider the following options for a $153,000 mortgage. Calculate the monthly payment and total…

A: Data given: Mortgage = $153,000 Option 1: N= 30 years Rate = 4.3% Closing cost = $1500 and no point…

Q: Please show working You get a 15 year, 3.5% fixed-rate mortgage with one point, borrowing $300,000.…

A: Assumption: since question doesn't specify the payment frequency, we will assume that the payments…

Q: Suppose you decide to borrow $330,000 of cash to purchase a house and take out a 20-year fixed rate…

A: Here, Borrowed Amount (PV) is $330,000 Interest Rate (r) is 8% Time Period of Mortgage (n) is 20…

Q: Suppose you take out a 30-year mortgage for $ 225000 at 8.5% interest. The monthly payments on this…

A: Mortgage is a loan contact used to buy capital assets such as houses. In Mortgages, title of asset…

Q: Consider a 30-year, 6% loan for $240,000 with fixed monthly payments. a) What will be the remaining…

A: Annual worth distributes present worth into equivalent uniform value over its useful life.

Q: Suppose you want to purchase a home for $425,000 with a 30-year mortgage at 4.14% interest. Suppose…

A: We can determine the monthly payments using the PMT function in excel. The syntax is: PMT (rate,…

Q: Suppose you have a $175,0000 30-year mortgage with a 4.5% interest rate on the loan. a. Find the…

A: The mortgage is a type of loan taken by providing a collateral asset to secure the loan. This kind…

Q: Do you want to buy $187,000 home. You plan to pay 20% as a down payment and then take out a 30 year…

A: Given information: Purchase Price = $187,000 Loan = $187,000-20%=$149,600 Time = 30 years Since the…

Q: You plan to purchase a house for $ 400,000 and you will make a 20% down payment. You are evaluating…

A: Price of house $400,000 Down payment [$400,000*20%] $80,000 Loan amount or PV of loan $320,000…

Q: You plan on borrowing $320,000 for a mortgage and are considering the following two loan options: a…

A: Using excel PMT function

Q: Suppose you have a $175,000 30-year mortgage with a 4.5% interest rate on the loan. If you pay $975…

A: According to the question, we need to find the time period in which the loan will be paid off. It…

Q: ou have a 30-year mortgage loan for $250,000 with an interest rate of 6% which requires you to make…

A: This pertains to time value of money. The concept of time value of money tells us that worth of…

Q: You are buying your first house for $220,000 and are paying $30,000 as a down payment. You have…

A: Answer) Calculation of monthly payment Installments are to be paid monthly Amount Borrowed…

Q: Suppose you have budgeted $ 950 a month towards a mortgage. If you are offered a 15-year mortgage at…

A: A= $950 m=12 n=15 year r=6.25%

Q: Suppose a bank offers you an 8% interest rate on a 30-year mortgage to be paid back with monthly…

A: Period = 30 Years Monthly period (t) = 30*12 = 360 Interest rate = 8% Monthly interest rate (i) =…

Q: Suppose you want to purchase a house. Your take-home pay is $⁢2830 per month, and you wish to stay…

A: Monthly affordable payment (M) = (1/4) of $2830 = $707.50 r = 3.95% per annum = 0.329167% per month…

Question

100%

Suppose you want a 35-year, fixed-rate mortgage loan in the amount of $144,400. If the lowest fixed annual interest rate you can find is 5.5%, find the monthly mortgage payment

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Inputs

VIEW

Answer

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Calculating interest and APR of installment loan. Assuming that interest is the only finance charge, how much interest would be paid on a 5,000 installment loan to be repaid in 36 monthly installments of 166.10? What is the APR on this loan?
Del Hawley, owner of Hawleys Hardware, is negotiating with First City Bank for a 1-year loan of 50,000. First City has offered Hawley the alternatives listed here. Calculate the effective annual interest rate for each alternative. Which alternative has the lowest effective annual interest rate? a. A 12% annual rate on a simple interest loan, with no compensating balance required and interest due at the end of the year b. A 9% annual rate on a simple interest loan, with a 20% compensating balance required and interest due at the end of the year c. An 8.75% annual rate on a discounted loan, with a 15% compensating balance d. Interest figured as 8% of the 50,000 amount, payable at the end of the year, but with the loan amount repayable in monthly installments during the year
Calculating single-payment loan amount due at maturity. Stanley Price plans to borrow 8,000 for five years. The loan will be repaid with a single payment after five years, and the interest on the loan will be computed using the simple interest method at an annual rate of 6 percent. How much will Stanley have to pay in five years? How much will he have to pay at maturity if hes required to make annual interest payments at the end of each year?
Suppose you take out a 30-year mortgage of $100,000 with a fixed interest rate of 5 percent. You must make 360 equal monthly payments. Write an equation that defines what the payment is?
Suppose your gross monthly income is $5,300 and your current monthly payments are $525. If the bank will allow you to pay up to 36% of gross monthly income (less current monthly payments) for a monthly house payment, what is the maximum loan you can obtain if the rate for a 30-year mortgage is 4.65%? (Round your answer to the nearest cent.)
Consider a 30-year fixed-rate home loan of $410,500 with an interest rate of 3.125%.What is the monthly payment? (Round your answer to the nearest cent.)
Consider a $180,000 15-year, fixed-rate mortgage with an annual interest rate of 7.40% and monthly payments. How much of the total expenses on mortgage payments go toward interest during the third year (round to the nearest dollar)?
Suppose you have budgeted $ 950 a month towards a mortgage. If you are offered a 30 year mortgage at an interest rate of 4.25%, how expensive a home mortgage can you afford?
Oppenheimer Bank is offering a 30-year mortgage with an EAR of 5 3/8%. If you plan to borrow $150,000, what will your monthly payment be?